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Topic: Investing with Bondora (Read 1336 times)

Moderators: I apologize if Iam posting in the incorrect part of the forum, although I did not see a placeholder for Bondara. (Maybe it can be moved to a different part of the forum.. somewhere more relevant)

As the LC market slowly dries up has any one ventured into https://www.bondora.com ?They appear to be similar to LC in having a primary and secondary market, but its out of the US .

I had opened a new account and had done some leg work but have not invested yet. Here are some responses I received from Bondora support:

Quote

1) Is my account secured?1) Please elaborate.

2) Which Country is Bondora based in?2) Bondora is a leading peer-to-peer platform for investing in unsecured European personal loans, based in Tallinn, Estonia. We are currently issuing loans 3 countries such as Estonia, Finland and Spain, but we have investors from all over the world, mainly from Europe. For more information, please refer to following link - https://support.bondora.com/hc/en-us/articles/214229765-Who-can-invest-on-Bondora-

4) For the secondary market , can I setup filters based on country, etc?4) Yes - there are lots of filters available, including country.

5) Can the loan data in the secondary market available for download as an CSV file?5) Sure, all transaction ledgers and data on issued loans that is not covered by the data protection laws public are available and be downloaded via our public statistics and data export pages. It also includes Secondary Market transactions history.

6) Is API access available? If so where can I see my API key and documentation.6) Thank you for the interest! Yes, we do have an API available. With the API you can choose the criteria of your preference for your investments. The API is accessible on live site at https://api.bondora.com/ with all its documentation.

7) Are there any Fees? What are DCA fees?7) There are no fees for investing in the primary or secondary markets. A small collection and recovery fee is deducted from the cash flows of delinquent loans - this is to cover the debt servicing costs.

Well the Liquidity is not the same as what it was and add that to the notes cancelled after "Pending settlement" , that leaves us with even fewer purchased notes. But you are right, I should not have used the words "LC market is drying up".

Be careful about investing with Bondora. I had sent 500 euros (in dollars) in Feb. After about 3 days i noticed an additional 500 euros in my account. I though they gave me some kind of bonus but when I checked my credit card, it appears they pulled from my credit card. The was no response from support initially. I reached out to them via facebook and they mentioned it was a known problem and the money would be refunded.

Then they mentioned that I am not an accredited investor, so they cancelled my account. And this was after support kept asking me to fund my account from when it was opened in January.

They finally did refund the money to my credit card, but not the foreign transaction fees.I sent them another email this morning. Maybe I will have to send them some really nice posts on facebook again.Beware !!!!

I have been putting a little into Bondura since mid 2015 and now have about $6000 there. It's holding steady at 14.4% returns since the beginning until now.

You have to have an EU bank account to invest. Then you will have EU taxes from the country where your bank account is, so for me that means my 14.4% will be taxed at about 40% but that's fine. (Not a problem since those taxes go to healthcare, good transport, safe and clean cities, etc.)

Unlike in the beginning, you can no longer choose your own notes. You give bondora your money and set limits of how much to invest per note (as low as $5 per) and they spread it all out for you with some algorithms they have. So it's really P2P but you give up the control.

Moderators: I apologize if Iam posting in the incorrect part of the forum, although I did not see a placeholder for Bondara. (Maybe it can be moved to a different part of the forum.. somewhere more relevant)

As the LC market slowly dries up has any one ventured into https://www.bondora.com ?They appear to be similar to LC in having a primary and secondary market, but its out of the US .

I had opened a new account and had done some leg work but have not invested yet. Here are some responses I received from Bondora support:

Quote

1) Is my account secured?1) Please elaborate.

2) Which Country is Bondora based in?2) Bondora is a leading peer-to-peer platform for investing in unsecured European personal loans, based in Tallinn, Estonia. We are currently issuing loans 3 countries such as Estonia, Finland and Spain, but we have investors from all over the world, mainly from Europe. For more information, please refer to following link - https://support.bondora.com/hc/en-us/articles/214229765-Who-can-invest-on-Bondora-

4) For the secondary market , can I setup filters based on country, etc?4) Yes - there are lots of filters available, including country.

5) Can the loan data in the secondary market available for download as an CSV file?5) Sure, all transaction ledgers and data on issued loans that is not covered by the data protection laws public are available and be downloaded via our public statistics and data export pages. It also includes Secondary Market transactions history.

6) Is API access available? If so where can I see my API key and documentation.6) Thank you for the interest! Yes, we do have an API available. With the API you can choose the criteria of your preference for your investments. The API is accessible on live site at https://api.bondora.com/ with all its documentation.

7) Are there any Fees? What are DCA fees?7) There are no fees for investing in the primary or secondary markets. A small collection and recovery fee is deducted from the cash flows of delinquent loans - this is to cover the debt servicing costs.

Hey, hdsouza!

I have to add that the fees part is something that is not 100% clear always. They deduct up to 35% from the cashflow recovered and I personally think that this is a lot (up to 35% means that they average it to 35%, for some loans the deduction is bigger and for some smaller). So, "A small collection and recovery fee.." is a bit soft to say.

I started investing in Bondora early 2013 and stopped around late 2015 with one account and tried again with another account on early 2016. At first the returns were 20%+ according to Bondora, now they are rather 9-14%. One of my friend also tried with small amount and the results were ridiculous: 1000 euros invested, net realized gain -18,99 euro, but net profit according to Bondora was around 14%. So, go figure.. I haven't calculated my exact return due to several reasons, main being the dissapointment that came along with Bondora when they constantly changed their, well "things". I think I might broke even after tax. Pre-tax was something like 3600 deposits and 4700 withdrawals. We have to pay 20% tax from all interest and no deduction of bad loans is allowed (I reside in Estonia).

Today Bondora is targeting German market to get more investors. To me it seems that local investors are looking away from Bondora. There are some Latvian platforms that offer BuyBack Guarantee, also invoice financing and real estate development or backed investments. If you are patient and willing to go through the hassle that comes along with Bondora, it might pay off. Otherwise there are alternatives that are more investor friendly.

There are several threads on Bondora. This seems to be the most active, so I'll add my thoughts here. (even tho this thread is in the wrong place)

I recently opened an account with Bondora. They used to require US folks to have an EU bank account, which is difficult. That requirement has apparently gone away, so I opened an account. They do require you to prove that you are an "accredited investor" which is a hassle. I satisfied that requirement with a letter from my CPA. Web site asked me to upload a scan of my driver's license. Ok. Then they sent email telling me that a Driver's license is no longer acceptable ID. They required a scan of my passport! Yipes.

I did the initial wire xfer from my bank. Not best choice. Banks give lousy exchange rates on overseas wires. Next time (if there is a next time) I'll try a stock broker. Bondora also suggest some money transfer services, but they have even higher fees. So for a US person, getting money in and out is a bit of a trouble spot.

Once I was online I started learning about Bondora.

First, Bondora is SMALL relative to the P2P guys in the US. Very very small. They do about 1500 loans/month. Average loan size is 1900 Euro. That's about 3 million Euro/month, or 36 million Euro/year. I got these numbers from the spreadsheet of all loans which you can download.

Contrast that to LC, which is originating about $7 billion/year. (Euro and $ are almost same value.)

Bondora's originations are running at 1/200 the rate of Lendingclub!

What LC calls a "listing", Bondora calls an "auction". The Bondora API allows you to download a list of "auctions". When I first tried this, I was confused because the list was empty. The list of auctions is almost always empty! Auctions apparently start when a borrower finishes his application, and end THIRTY SECONDS LATER! So most of the time there are 0 auctions open, and once or twice an hour (on the average) an auction appears and is available for thirty seconds, and is then gone.

To use the API, you have to constantly poll, asking "are there any auctions?". The good news is that because the list is almost always empty, this polling is very fast and low cost.

Well, that's a little different. There's no "feeding time" frenzy as there is with LC or Prosper. LC and P allocate a loan to the first people who bid, and then the loan closes when enough people have bid to fund the loan. On Bondora, it appears that auctions are open for a minimum time (which I believe is 30 seconds, although their blog says it may soon be shorter) and the loan is "allocated" among the people who bid during the open window. I can't imagine why they would want to make this interval even shorter. Seems nuts. Would simply force people to poll more frequently.

There are some other interesting differences with their API vs LC and P. When you bid, the return values don't tell you how much you got or whether you got any at all. It tells you that your bid was posted. You have to remember the bid ID, and come back later and ask whether the bid was successful. They don't tell you how much later you should come back to check this! I guess I'll have to experiment. This is apparently a consequence of the open bidding window scheme. I think its a nice idea, but I haven't figured out how I'm going to handle it in my code yet. Seems like I'll need to keep a list of my open bids and then come back later and get the status and log that result. What if I make the query later and the bid is still open? Then will I have to come back even later and ask again? Maybe. There are 7 possible status values for a bid, according to the docs. Hopefully I will be able to avoid any logic in my code to deal with most of these. Still, I'll have to handle at least the categories (okbutnotyet, iscompleted, gotsomeerror). They give no clue how this works, so I'll just experiment, and then guess how to handle it, write code, and then learn why that was the wrong way to do it.

There is an API endpoint where I can ask for my past bids, both open and closed, but I haven't figured it out yet. So far it always returns an empty list of bids. I know that the automated investment tool has made many bids for me, so I expected to see a bunch of bids, but they don't show up when I make this query, so I'm thinkin' that those bids go somewhere else!

Aside: Every web API is different in big ways, and most of the stuff you need to know is NOT in the API documentation. Somehow there is a modern culture of documenting these APIs by only documenting the interface, ie "this endpoint returns these values". Yea, but when should I hit that endpoint, and what does it mean? The modern approach seems to be to write ZERO about how things work, so you have to figure it all out by experimentation and talking with others to learn ancient folklore. You can't design software until you figure out how stuff works, and you can't figure out the fine points until you've written software and tried to use it all. Pain in the ass! I had to figure it all out for LC and Prosper, and separately for LC's secondary market API, and for Funding Circle, and now I'm having to do the same for Bondora.

So far I haven't bid on any auctions. I've only used their automated investing tool. It appears to most of the time allocate me a 1 euro slice of a loan. Wow that's small. Well the loans are small to begin with, and I'm guessing that there are lots of people who would like a slice.

With only 50 new loans/day average, the pickin' is slim. Most of the loans of course have parameters that I don't like. If you start filtering, eliminating the high risk grades, or filtering on other parameters, like filtering out people with no credit experience, the # loans/day that are suitable is very small. If you can only get a few euro into each of these loans, then maybe you can only invest 5 or 10 euro/day, or something like that.

The Bondora blog says they've recently changed the allocation policy. They used to allocate bigger slices of loans to bigger investors. (I'm not sure exactly how this worked, as they don't write down the details of how things work in general.) Blog says they now allocate same to everyone. Well I can tell you that most loans I've got thru the automated investing thing on their web site are 1 Euro slices! Occasionally I get 10 Euro, and even got one 50 Euro slice. But if I'm gonna get 1 Euro most of the time, and I'm interested in only 5% (say) of their 50 new loans/day, that's 2.5 Euro per day of investment, which isn't going to generate enough interest to pay for the time it took to write this note!

Apparently 1 euro is the minimum slice of a loan you can own, however there is a blog post which appears to say that they're going to make this even smaller. Yipes! (This is a small company that keeps changing how things work as they learn and grow. Its an experiment.) The API has a parameter where you can specify a minimum investment in a loan, but they've recently obsoleted that parameter. I wonder could I end up owning e0.01 worth of a loan? I hope sanity kicks in and they won't allow that. I could end up with a e100,000 account which contained 10 million loans! That would make a heck of a monthly statement. Of course at their present rate of originating 18,000 loans/year, if I bought into 5% of them, that would be 900/year, which would mean I'd need 11 thousand years to buy all those loans. Hmm.

One thing I didn't like about their automated tool is that the controls are very coarse. You can specify which grades you will accept, but you can't specify an allocation among them. So at first I specified AA,A,B,C only to discover that almost all of my money was going into grade C. Only thing I could do to stop that was to turn off grade C. That really slowed down my investing! Apparently the high quality loans are a small fraction of the total.

As I learn more about how the API works (and I don't mean the so-called documentation, I mean how it actually works in practice), I plan to try some API-based bidding, to see if it works differently than the automated investing tool. For example, I wonder if I can get bigger slices of loans.

Oh, and I got to wondering... Bondora has been around since 2009, almost as long as Prosper and Lendingclub. So how come they're so small? I took the big spreadsheet of all loans, and counted by year of origination. It appears that they didn't grow during the first 4 or so years, but are growing now. Some years they grow and some they don't. 2015 & 2016 no growth. 2017 big growth. 2018 is running about same rate as 2017, so if that continues this will be a no-growth year. I suppose its a sign of stability that they've been around this long, but they aren't exactly taking the world by storm. I don't know what to make of this.

Does it worry you the varying size of loan chunks you get? In other words, if you get a large chunk of the "bad" loans and all the "good" loans only get 1euro invested...seems you could be heavily weighted to the "bad" with only a few large chunks very quickly.

Does it worry you the varying size of loan chunks you get? In other words, if you get a large chunk of the "bad" loans and all the "good" loans only get 1euro invested...seems you could be heavily weighted to the "bad" with only a few large chunks very quickly.

Yea. I'd prefer a different allocation. I figure with my own software perhaps I will be able to keep my portfolio from heavily weighting the high-risk end.

On the other hand, this situation may simply reflect the supply and demand. In other words, if there are lots of high risk loans and many fewer low risk loans, then it may be that the amount of money I can invest in the low risk loans is just severely limited no matter what I do.

I can look at the published data on all existing loans to see the distribution of supply among grades, but they only way I can learn about demand is to participate in the market, so I'm doing that and learning.

I'm also worried that maybe the Bondora market is just too small to let one make choices.